I ran into this issue as well. I don't remember the exact fix. It seem like I had to download the current change set (at the time) and up load everything. Then it was fixed. I know there was an error with the Categories in WLW because of changes that I
make weeks ago, but that has all been resolved and I haven't received any issues since. If I remember the cause I will post it.

cwest wrote:
Although a different issue (I think) WLW will often error with "Server Error 0 Occurred. Object reference not set to an instance of an object."